A strong start to the year, confirming Amundi’s growth trend.
Net inflows1 of €40bn, bringing AuM to €1,452bn.
Sharp improvement in results:
- Accounting net income of €221m, up 54% (vs. Q1 2017 reported)
- Adjusted net income2 of €240m, up 15% (on a comparable basis3)
Business activity
- Assets under management: €1,452bn at 31 March 2018, +5.8% vs. 31 March 20174
- Strong and diversified net inflows1: +€39.8bn, driven by each client segment, region and investment expertise
Results
Sharp improvement in results:
- Accounting net income of €221m, up by a strong 54.3% vs Q1 2017 reported
- Adjusted net income2 of €240m, up 15% vs. Q1 2017 on a comparable basis3, with:
- Net asset management revenue up 6.8%3
- Operating expenses5 down 5.2%3 to €336m, reflecting the rapid implementation of Pioneer-related synergies
- A cost/income ratio2 of 50.7%, an improvement of 3.7 pts3 over Q1 2017
Integration of Pioneer and synergies
- Rapid implementation of the Pioneer integration plan:
- workforce reduction already achieved by more than 50%
- legal merger achieved in eight countries
- first IT migrations successfully completed, others expected to take place by first-half 2019
- In all, the €150m amount of synergies has been confirmed, and the phasing is set to be faster than announced, with 60% of synergies accounted for in 2018 (versus 40% projected)
Amundi’s Board of Directors, chaired by Xavier Musca, convened on 26 April 2018 to review the financial statements for the first quarter of 2018.
High level of activity in Q1 2018
strong and diversified net inflows of +€40bn, bringing assets under management to €1,452bn
Amundi's assets under management amounted to €1,452bn at 31 March 2018, reflecting excellent business activity (net inflows of +€39.8 billion in Q1 2018), partially offset by a negative market effect (-€13.5 billion).
These strong net inflows were driven by both client segments, Retail and Institutionals, by all regions, and by all investment expertises. This demonstrates the strength of Amundi's diversified business model.
Note: all variation figures below are computed vs a combined Q1 2017 (3 months Amundi + 3 months Pioneer).
The Retail segment enjoyed a high level of activity with net inflows of +€21.7bn in Q1 2018 (versus +€13.4bn in Q1 2017 combined), generated by all distribution channels. The French networks continued to ramp up (+€2.6bn), driven by the higher proportion of unit-linked life insurance policy subscriptions (confirming the recovery observed since mid-2016). Inflows in the international networks remained strong (particularly in Italy with +€2.7bn in Medium/Long Term6 products), reflecting the success of the partnership with UniCredit. Inflows were very brisk for third-party distributors (+€4.1bn), with an excellent trend in Europe in particular (primarily in Italy and Germany) as well as in Asia. Inflows in the Asian joint ventures were particularly strong (+€12.1bn, with an especially high amount in China).
The Institutionals segment once again recorded significant net inflows, at +€18.1bn in Q1 2018 (versus +€15.8bn in Q1 2017 combined), balanced between treasury products and MLT products. Commercial activity during the quarter was robust, in particular for sovereign clients, with significant inflows in MLT assets, and for Corporate clients in treasury products.
Net inflows were also evenly split by asset class, driven by all investment expertises, and were of high quality, with a significant MLT asset component (+€28.1bn, or 71% of the total). This high level was above the average observed in previous quarters (average quarterly net inflows for MLT assets of +€9.1bn in 2017). These inflows, which include active products (+€9bn(7)) and passive products (+€7bn7), were boosted by particularly high net inflows in China. Inflows for treasury products were driven by the Institutionals and Corporates segment.
From a geographic viewpoint, net inflows were once again driven by the international segment (+€25.4bn), which accounted for 64% of the total. Business activity was strong in all regions, with a significant contribution from Asia and Italy. Over one year, international assets under management increased by 9.9%, and they now represent 41% of Amundi’s total AUM, and 57% of AUM excluding Crédit Agricole and Societe Generale insurance companies.
In France, Amundi has further reinforced its leadership position by achieving in the first quarter 2018 more than two thirds of the net inflows in open-ended funds domiciled in France8.
Q1 2018 results increased significantly
Solid gains in net asset management revenue and an improved cost/income ratio (-3.7 points9)
Sharp growth in accounting net income (€221m, up 54.3%10)
Adjusted net income of €240m9, up significantly (+15.0%11)
Amundi’s Q1 2018 results reflect a very strong start to the year and confirm the Group’s ability to grow while keeping costs under control, thanks in particular to Pioneer-related synergies.
Accounting data
Accounting income in Q1 2018 (including integration costs and the amortisation of distribution contracts) amounted to €221m, up by a sharp 54.3% compared with Q1 2017 reported, benefiting from the contribution of Pioneer (consolidated as from 1 July 2017) and the Group’s strong financial performance.
Adjusted data
Net asset management revenue grew steadily (€667m, up 6.8%11), thanks to:
- A 2.9%11 increase in net management fees (€615m), in line with the growth in AUM over 12 months;
- A very high level of performance fees (€52m, up 95.3%11), reflecting the funds’ strong performance12 over the last 12 months.
The negative contribution of net financial income (-€5m) was linked to interest expense and to the mark-to-market effect on the investment portfolio. As a reminder, financial income in Q1 2017 included investment capital gains in view of the Pioneer acquisition.
Operating expenses fell significantly (€336m, down 5.2%11), reflecting the rapid implementation of the Pioneer integration plan and thus of the announced synergies (workforce reductions in particular). The cost/income ratio therefore stood at 50.7%, a 3.7 point decrease11 from Q1 2017, and gross operating income reached €326m, up 9.9%11 vs. Q1 2017.
Taking into consideration the contribution (up 54,3%11) from equity-accounted entities (primarily the Asian joint ventures) to income, and a tax charge of €95m, net income, Group share totalled €240m, up 15.0%11 compared with Q1 2017 on a comparable basis.
Pioneer integration
The Pioneer integration plan is being implemented quickly: more than 50% of the workforce reductions had already been completed at end-March 2018, several major legal mergers have taken place (Germany, Italy, the United States, Switzerland, Luxembourg, Czech Republic, Japan and Taiwan) and the first IT migrations have been successfully completed in Germany and Czech Republic. The IT migration processes are underway for the other platforms and are expected to be completed in 2018 in Europe and in the first half of 2019 in the United States.
The good progress on the Pioneer integration suggests that the phasing of the synergies will be faster than announced, with 60% of synergies generated in 2018 (versus 40% projected).
Financial communication calendar
- 15 May 2018: General Shareholders’ Meeting
- 22 May 2018: Ex-dividend date
- 24 May 2018: Dividend payment date
- 2 August 2018: Publication of first-half 2018 results
- 26 October 2018: Publication of results for the first nine months of 2018
Amundi’s financial disclosures for the first quarter of 2018 consist of this press release and the attached presentation, which are available on http://legroupe.amundi.com.
Combined income statement1
| €m | Q1 2018 | Q1 2017 | Change Q1/Q1 |
| Net revenue2 | 663 | 652 | 1.7% |
| o/w net management fees | 615 | 598 | 2.9% |
| o/w performance fees | 52 | 27 | 95.3% |
| o/w Financial income and other net income 2 | -5 | 27 | NS |
| Adjusted operating expenses 3 | -336 | -355 | -5.2% |
| Adjusted gross operating income 2-3 | 326 | 297 | 9.9% |
| Adjusted cost/income ratio 2-3 | 50.7% | 54.4% | -3.7 pts |
| Cost of risk & Other | -4 | -3 | = |
| Equity-accounted entities | 12 | 8 | 54.3% |
| Income before tax 2-3 | 334 | 301 | 11.1% |
| Taxes 2-3 | -95 | -93 | 2.4% |
| Adjusted net income, Group share 2-3 | 240 | 208 | 15.0% |
| Amortisation of distribution contracts after tax | -12 | -3 | NS |
| Pioneer integration costs after tax | -6 | -4 | NS |
| Net income, Group share | 221 | 202 | 9.3% |
1- Combined data in Q1 2017 and Q1 2018: 3 months Amundi + Pioneer.
2- Excluding amortisation of UniCredit, SG, and Bawag distribution contracts.
3- Excluding costs associated with the integration of Pioneer.
Change in assets under management from end-December 2016 to end-March 2018
To secure its communication, Amundi certifies its contents on Wiztrust.
You can check the authenticity on the website www.wiztrust.com
